D.—.l

17

My telegram referred to other very important matters; and it contained an instruction to you to "fully cable proceedings" consequent upon its receipt. But you have not so telegraphed; and I remain practically unaware of what you have done, or propose to do, for the purpose of giving effect to my instructions. I have, &c., The Agent-General for New Zealand, London. Julius Vogel. •

No. 27. The Hon. J. Vogel to the Agent-Genebal. (No. 293.) Sic, — General Government Offices, Dunedin, 24th December, 1873, By my letter of October 27, No. 240,1 instructed you that, after the expiration of the contract with the New Zealand Shipping Company, you were to divide the Government business between the various companies and firms engaged in the carrying trade of New Zealand, including the New Zealand Company, Messrs. Shaw, Savill, and Co., and the Albion Shipping Company. I have now further to instruct you upon the same subject. Since the date of my letter, a severe competition has been going on between the New Zealand Company and Shaw, Savill, and Co., the result of which has been very considerably to reduce rates. The Albion Company has also commenced business between London and New Zealand. I have no proof that the Company is working with Shaw, Savill, and Co., but I judge that such is more or less the case, from the fact that the whole of the opposition now appears to be between the New Zealand Company on the one hand, and Shaw, Savill, and Co. and the Albion Company on the other. I perceive the possibility, not to say the probability, that this competition will lead either to the New Zealand Company withdrawing from the business or amalgamating with Shaw, Savill, and Co., the consequence of which would be, not only a return to the old monopoly, but the enforcement of higher rates, in order to recoup competitive losses. I desire to repeat that I do not consider any benefit is to be gained by your paying for freight and passengers, unduly low rates, resulting, as such a state of things must do, in a tendency to check competition. I still wish you, therefore, to pay what you consider fair rates. 1 see so much present danger of the Now Zealand Company being driven off or tempted to amalgamate, and a consequent return to the old monopoly, with higher rates than ever, that I have come to the conclusion to alter for a short time the distribution of the business which I instructed you, by my letter of October 27th, to make. You will be so good, until further instructed, to so divide your business as to give to theNNcrw r Zealand Company three-fifths of all your London business, dividing the other two-fifths between the Albion Company and Shaw, Savill, and Co., in such proportions as you consider desirable. Should another londfide competitor enter the field you will at once advise me by telegram, so that I may be able further to consider the whole question. I beg that you will at your earliest convenience send to me the fullest particulars you can obtain as to the position and intention of the Albion Company with respect to the London trade. Nothing in this letter is meant to refer to the Glasgow business carried on by the Albion Company. I have to point out that it will not be in accordance with these instructions for you to enter into prolonged contracts with any company or firm. As the division of business may be altered from time to time, it is necessary you should be able to alter your arrangements at short notice. I have, therefore, to positively instruct you not to enter into any arrangement extending over a period, or for a number of ships, which you cannot terminate by three months' notice, or which would not work itself out in four months; but you are not to consider this instruction to be an invitation to make any contract extending over a period. I would rather that your arrangements should be such as to provide for three months in advauce such shipping as you may require; and until further instructed by me, you will divide your business in the manner already specified herein. "Whilst on the subject I wish to write a few words respecting Messrs. Shaw, Savil], and Co. I enclose you copy of a telegraphic correspondence which has just taken place with the agent of the firm in Wellington. You will observe that I have taken care to leave you perfectly free in respect to your communication with those gentlemen, and that you are in no way committed to affording them more information than you consider desirable. I draw your attention to this fact, because there is reason to think that they aspire to exercise a control whicli this Government will not, under any circumstances, sanction. Before the commencement of last Session the firm wrote to their agents a species of circular letter covering a political attack upon the Government whilst praising yourself. A letter of the kind of course had no effect. Messrs. Shaw, Savill, and Co. are not likely to secure Parliamentary Agents, as your own knowledge of New Zealand will sufficiently assure you. I have heard that between your office and Messrs. Shaw, Savill, and Co. a telegraph wire is connected, and it has frequently been stated that your officers are in the habit of too freely communicating with Messrs. Shaw, Savil], and Co. I mention these statements only to enable me to give you the assurance that all parties in New Zealand would combine to sanction any expenditure in preference to Messrs. Shaw, Savill, and Co. exercising, in respect to the Government of the Colony, a dictatorial power. I have, &c, The Agent-General for New Zealand, London. Julius Vooel 3-D. 1.